The clash between new and traditional media, between disruption and business as usual, was a major theme at the panel discussion that took place during Variety’s Business Managers Elite Breakfast at the Montage Beverly Hills hotel on Nov. 13.
“As an entrepreneur, I had to unlearn everything I had learned at corporations,” said Jeff Gaspin, chairman of streaming content provider TAPP and former chairman at NBC Universal Television Entertainment. At startups, “if you don’t do something that day, nothing happens.” By contrast, large legacy companies move forward through their sheer momentum.
“I call it inertia,” said Marc Graboff, another former NBC exec who until recently led content owner and developer Core Media Group. He added that with a big media company you’re “dealing with a mindset rooted in the way they’ve always done business.” (Graboff recently exited Core prior to its consolidation into a new joint venture between parent company Apollo Global Management and 21st Century Fox.) Clarification: Core remains a stand-alone entity that is part of a new joint venture housing 21st Century Fox’s Shine Group and Apollo Global Management’s Endemol and Core.
Angela Courtin, chief marketing officer at Relativity Media, noted that legacy studios, to their detriment, spend many more marketing dollars in traditional media than in digital. She suggested they should rely more on data “that can help you find the people who raise their hands, telling you, ‘I love that content.’”
Correctly using data, she added, “can reduce your marketing costs before you have to spend a single dollar in TV advertising” by identifying the right audience.
Companies with access to the right data can more effectively control their brands, added Alan J. Epstein, chair of the West Coast business transaction group at law firm Venable, LLC. “If you have all that information, it gives you a huge edge.”
Kelly Day, chief digital officer at Awesomeness TV, told of how the YouTube-focused digital unit of DreamWorks Animation is melding over-the-top distribution with more traditional methods via three feature films this year: distribution rights to “The Smosh Movie” were picked up by Lionsgate; “Expelled,” with Vine celeb Cameron Dallas, will mostly go direct to consumers; Weinstein Co. picked up the third, a documentary.
Like it or not, there’s still no escaping legacy businesses, said Graboff. “You have to deal with them because they’re still the gatekeepers.”
But for how long? Moderator Andrew Wallenstein, Variety‘s co-editor-in-chief, asked the panelists whether the kind of unbundling recently exhibited by HBO and CBS – which shook up the TV biz last month when they separately announced they will introduce over-the-top streaming services – is a transformative trend.
“It’s an evolution,” said Gaspin, noting that the trend will grow as millennials, many of whom do not use cable, increase in numbers as a portion of the media-consuming public.
Graboff agreed. “Most people will not want 500 channels,” he said. “This will put tremendous pressure on cable networks, but the shakeout may not happen for 10 years.” Meanwhile, he added, the networks will spend more money on content to see them through the transition.
That would be good news for producers.
(Pictured: City National Bank’s Russell Goldsmith, Variety publisher Michelle Sobrino-Stearns and Business Managers Elite Award honoree George Savitsky)
Russell Goldsmith, chairman and CEO of event sponsor City National Bank, set the stage for the panel in his opening remarks. He pointed out that while the value of content has never been greater, the industry faces enormous challenges from the continuing fragmentation of distribution media and audiences.
Two other issues confronting the business, he added, are runaway production – with California taking a huge hit over the years as other states and Canada have “outsmarted us” and lured away much of the region’s feature film production – and content piracy.
Goldsmith called the recent passage of a bill tripling California’s tax incentive a positive development, and urged better protection of intellectual property rights. Referring to the upcoming political fundraising season, he said, “We should speak up on behalf of IP to the politicians who come to California to take our money.”
The event honored George Savitsky, founder and president of Savitsky, Satin and Bacon, with its Business Managers Elite Award, given annually to a business manager who has not only built a successful firm but has also given back significantly to the community through philanthropic endeavors. Among his causes: City of Hope and the Juvenile Diabetes Research Foundation.
In addition to City National Bank, event sponsors included Jet Edge and Venable, LLP.
Correction: An earlier version of this post reported that Core had been taken over by Endemol North America. The company remains a stand-alone entity that is part of the joint venture housing 21st Century Fox’s Shine Group and Apollo Global Management’s Endemol and Core.
(Pictured at top: Andrew Wallenstein, Jeff Gaspin, Marc Graboff, Kelly Day, Angela Courtin and Alan Epstein at Variety’s Business Managers Elite Breakfast)